You should issue them W-2, not 1099-NEC. That way, none of it is subject to Self employment or FICA tax, if you are a sole proprietor (Schedule C).
Furthermore, then, they do not file a tax return because the filing threshold for a dependent, with earned income, from wages, is $12,400 They can still be your dependent.
You must issue her a w-2. If she is under 18, you do not have to withhold FICA. You should not give her a 1099-NEC.
Reference: https://www.irs.gov/businesses/small-businesses-self-employed/family-help
distributions shown on a 1099-DIV,
